• 08
  • June
    2011

In Tennessee and throughout the United States, the average length of time it takes for a bank to process a homeowner has skyrocketed. In the first quarter of 2011, the average length of a Tennessee foreclosure was a staggering 411 days from beginning to end. This has more than doubled from the first quarter of 2010, when the average length was 199 days. Nationally, the current average length is near 400 days as well.

And now, that ever-increasing length of time is turning out to be a liability. Many Tennessee homeowners who were forced to vacate and abandon their homes after last year's record flood, many of whom ultimately filed for bankruptcy and allowed their homes to go into foreclosure have been hit with a new liability: their homeowners association fees.

Until 2005, those fees were eliminated in a bankruptcy as soon as the debtor vacated the home. The law changed that year, however, and now debtors remain liable for association fees as long as they legally own the home. Therefore, until the foreclosure is complete, homeowners must continue to pay fees for homes they no longer live in. With a 400+ day waiting period for foreclosure, it is easy to see how those fees can quickly stack up and become unmanageable.

Many homeowners are angry, accusing the banks of dragging their feet on foreclosures so they can avoid paying the extra fees and costs that come along with the home. Banks deny this, of course, simply stating that "bankruptcy or litigation may result in a delay of foreclosure proceedings."

Hopefully, this issue is brought to light and the law is changed. Tennessee homeowners who have lost everything simply cannot be expected to pay association fees for homes they no longer even set foot in.

Source: The Tennessean, "Foreclosure, bankruptcy won't end homeowners association fee," Brandon Gee, 17 May 2011